Latest Exchange Release Means Opportunity for Partners

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The release of Microsoft Exchange 12 will be the motivation many businesses need to upgrade their Exchange Server, even if they still lag a version behind. But adoption of the 64-bit Exchange 12 is likely to be slow.

In its plans to release Exchange 12 exclusively for the 64-bit platform, Microsoft Corp. is sowing the field for VARs that expect to reap the harvest of upgrade and integration jobs.

VARs expect the latest version release to incite the usual impulse for customers to upgrade, even if they continue to lag one or two versions behind.

However, the harvest will drag behind those of previous Exchange version releases, as Exchange 12 itself is hampered by complexity and the limited availability of 64-bit platforms and components, one analyst told Channel Insider.

But many VARs and Systems Integrators remain excited about the prospects for upgrades to Exchange 2003 that the version release will inspire and the lucrative migrations to Exchange 12 that will become inevitable as older versions are phased out.

Technical support for Exchange 5.5 terminates next year. One VAR is using the release to position its solution as a transition from 32- to 64-bit platforms.

"I've been looking for a really good business case to use (to push adoption of Exchange 2003) and Microsoft has finally given it to me," said Rich DeBrino, chief information officer at Advances in Technology, Everett, Wash., an IT outsourcer for financial and healthcare companies.

"Most people won't make the changes they need to make anyway, until they see the looming 'oh my god'," De Brino said.

"End of life announcements and version releases will generally do it. Anything that pushes the customer to make the decisions they should be making anyway is a good thing."

De Brino estimates 50 percent of his customers remain on Exchange 2000 or 5.5 and he expects the latest release to encourage 100 percent of them to upgrade to Exchange 2003.

But adoption of Exchange 12 will be limited, said Peter Pawlak, server analyst at Directions on Microsoft, Redmond, Wash., a Microsoft research firm.

"This freezes adoption (of the new technology)," Pawlak said. "It puts a damper on the folks who otherwise would have opted for the upgrade to the latest Exchange.

"There are a lot of systems out there that people would like to upgrade, but most of them won't be able to run the application," he said.

"If you bought anything any more than a year ago, you don't have that 64-bit hardware. But it's unlikely even if they bought that, that they installed 64-bit operating system."

Further challenges, such as incompatibility with SQL Server and Small Business Server will only further drown adoption, he said.

Pawlak expects it to be another two to two and a half years before adoption of Exchange 12 is beneficial to companies.

But the ultimate complexity of that migration positions VARs for profitable integration jobs in the next three to four years.

"Every time they make it harder for customers to move from one system to another, it increases opportunity for Systems Integrators and VARs to gain revenue from moving customers from the previous version to the current," said Keith McCall, chief technology officer at Azaleos Corporation, Redmond, Wash., a managed service provider offering message application solutions.

Azaleos is using the product release to encourage adoption of their own solution, which is designed to carry applications across the transition from 32- to 64-bit.

Azaleos offers an alternative, an appliance that delivers Exchange and is managed and monitored remotely and converted seamlessly to Exchange 12 when it is ultimately released.

"The (ultimate) migration to Exchange 12 is inevitable," said McCall. "End users basically have two options: either lengthen the lifespan of (Exchange) 2003 or find an alternative."